Alternative currency An alternative currency (or private currency) is any currency used as an alternative to the dominant national or multinational currency systems (usually referred to as national or fiat money). They are created by an individual, corporation, or organization, they can be created by national, state, or local governments, or they can arise naturally as people begin to use a certain commodity as a currency. Mutual credit is a form of alternative currency, and thus any form of lending that does not go through the banking system can be considered a form of alternative currency. When used in combination with or when designed to work in combination with national or multinational fiat currencies they can be referred to as complementary currency. Most complementary currencies are also local currencies and are limited to a certain region. Barters are another type of alternative currency. Often there are issues related to paying tax. List of alternative currencies Advantages See also
Complementary currency Complementary currency describes currencies that exists as a supplement to our conventional (national) money. “A complementary currency (…) is an agreement to use something else than legal tender (i.e. national money) as a medium of exchange, with the purpose to link unmet needs with otherwise unused resources” (Lietaer & Hallsmith 2006: 2). Complementary currencies advocates thus don't claim a full Separation of money and state. Purposes Complementary currencies are often designed intentionally to address specific issues or problems. Most complementary currencies have multiple purposes and/or are intended to address multiple issues. In the current economic climate, some local money projects can also be promoted as low carbon, by encouraging localisation of trade and relationshipslifeboat currenciesencouraging use of under-used resourcesrecognising the informal economy Complementary currencies Types of complementary currencies Major activists Related concepts
Crom Alternative Currency Mutual credit Mutual credit is a type of alternative currency in which the currency used in a transaction can be created at the time of the transaction. LETS are mutual credit systems. Typically this involves keeping track of each individual's credit or debit balance. Advantages and disadvantages One economic advantage of mutual credit is that the currency supply is self-regulating—the money supply expands and contracts as needed, without any managing authority. One downside of mutual credit, as with any form of credit, is the possibility of exploiting the system by running up a negative balance and then leaving. Examples and types of systems See also References T.H.
Local Exchange Trading Systems A local exchange trading system (also local employment and trading system or local energy transfer system; abbreviated to LETS or LETSystem) is a locally initiated, democratically organised, not-for-profit community enterprise that provides a community information service and record transactions of members exchanging goods and services by using the currency of locally created LETS Credits. History Michael Linton originated the term "local exchange trading system" in 1983 and for a time ran the Comox Valley LETSystems in Courtenay, British Columbia. The system he designed was intended as an adjunct to the national currency, rather than a replacement for it, although there are examples of individuals who have managed to replace their use of national currency through inventive usage of LETS. A number of people have problems adjusting to the different ways of operating using a LETSystem. Criteria Of these criteria, "equivalence" is the most controversial. Operation
Private currency A private currency is a currency issued by a private organization, be it a commercial business or a nonprofit enterprise. It is often contrasted with fiat currency issued by governments or central banks. In many countries, the issuance of private paper currencies is severely restricted by law. Today, there are over four-thousand privately issued currencies in more than 35 countries. History United States A private $1 note, issued by the "Delaware Bridge Company" of New Jersey 1836-1841. In the United States, the Free Banking Era lasted between 1837 and 1866, when almost anyone could issue paper money. Ithaca hours Main article: Ithaca Hours Since 1991, residents of and around the city of Ithaca in Western New York State have been using a private currency in which participating workers either earn or purchase Ithaca Hours, which may be used to buy goods and services locally. BerkShares United States Private Dollars The U.S. Liberty Dollars Bitcoin
LETS.LOOK Community Exchange System The Community Exchange System (CES) is an Internet-based trading network which allows participants to buy and sell goods and services without using a national currency. While the relatively new system can be used as an alternative to traditional currencies such as the dollar or Euro or South African rand, the Community Exchange System is a complementary currency in the sense that it functions alongside established currencies. It is international in scope. It does not have printed money or coins but uses computer technology to serve as an "online money and banking system" or alternative exchange system and as a marketplace. It is an advance from an arrangement in which either one good or service is exchanged for another good or service, or commonly called barter, since it uses a digital unit of value. While there are reports that the system is growing, in 2011 the system handles only a tiny fraction of international world commercial activity. Background Size
LETS Groups around the world - LETS-Linkup International LETS Directory Time-based currency In economics, a time-based currency is an alternative currency where the unit of exchange is the person-hour. Some time-based currencies value everyone’s contributions equally: one hour equals one service credit. In these systems, one person volunteers to work for an hour for another person; thus, they are credited with one hour, which they can redeem for an hour of service from another volunteer. Early time-based currency exchanges Edgar S. Time Dollars Time Banks Time banking Time banking is a pattern of reciprocal service exchange that uses units of time as currency. Origins and philosophy According to Edgar S. As a philosophy, time banking also known as Time Trade is founded upon five principles, known as Time Banking's Core Values: Everyone is an assetSome work is beyond a monetary priceReciprocity in helpingSocial networks are necessaryA respect for all human beings Ideally, time banking builds community. Time banking and the time bank Dr.
Bitcoin Time Banks Community Directory | Community Directory How to Start Your Own Private Currency - Derek Thompson - Business It's not as complicated as it sounds. All you need is a system other people can understand and, most importantly, trust. Here's a nightmare scenario shared by some mainstream investors, goldbugs and Ron Paul devotees: The year is 2013. Start your own currency. It sounds complicated, but really it's as simple as three steps. No gold? The success of Ithaca HOURS shows you don't need to be a conspiracy theorist to see the virtue of private currencies. U.S. dollars, like most modern money, are backed by a promise, not a metal. But how can a government-backed Zimbabwe currency be utterly worthless, while a pixelated pile of gold on the game World of Warcraft can be worth more than the computer screen that creates the pixels? One clue to the answer lives in one of the most common words for money: credit. "Imagine that we are on a gold standard and a severe drought hits," economist Nick Blanchard explained to me in a useful example. Architects of private currencies face a chicken-egg challenge.
Virtual economy A virtual economy (or sometimes synthetic economy) is an emergent economy existing in a virtual persistent world, usually exchanging virtual goods in the context of an Internet game. People enter these virtual economies for recreation and entertainment rather than necessity, which means that virtual economies lack the aspects of a real economy that are not considered to be "fun" (for instance, avatars in a virtual economy often do not need to buy food in order to survive, and usually do not have any biological needs at all). However, some people do interact with virtual economies for "real" economic benefit. Despite primarily dealing with in-game currencies, this term also encompasses the selling of virtual currency for real money. Overview Virtual economies are observed in MUDs and massively multi player online role-playing games (MMORPGs). The existence of these conditions create an economic system with properties similar to those seen in contemporary economies. Marketplace